By Kate Abnett

BRUSSELS, (Reuters) – The European Union may make more information about trading in its carbon markets available, as a draft document suggests. This is in response to calls by some governments for financial speculators to be limited from the scheme.

Recent months have seen a rise in carbon prices due to the EU’s stricter climate goals and rising gas prices, which has led some power generators switching to lower-emitting coke. After rising by 150% between 2021 and now, permits in the EU’s carbon market reached a new record of 98.49 Euros per tonne.

Poland, along with other countries have been calling for the EU’s intervention to limit financial speculators’ participation on the markets as prices rose. This week, the European Parliament’s leading lawmaker for the scheme’s reforms proposed rules that would make participants’ behavior more transparent.

These concerns will be addressed by the European Commission in a communications due out on March. 2.

“The Commission will investigate ways to provide more detailed public reporting about different types of derivatives. The communication draft said that better visibility and more thorough scrutiny of market options contracts might provide additional insight into overall market dynamics.

The carbon market in Europe forces power generators, factories and airlines to purchase permits to reduce their carbon emissions. To ensure that emissions are also decreasing, the amount of permits being released to the market slowly decreases every year.

Most EU carbon trades take place through derivative contracts. EU securities regulator ESMA publishes weekly data reports that include participants’ positions for carbon derivatives. It published a preliminary investigation in November which found there wasn’t any evidence of manipulation. Next month, the final report of the ESMA is expected.

According to the draft which is subject to change, the Commission will determine whether certain trading behaviors would need further regulation based on the final ESMA Report.

It was stated that high CO2 prices did not cause the current surge in Europe’s electricity costs. This is mainly due to rising costs.

It stated that the impact of rising electricity prices on electric prices was eight times greater than the effects of increasing carbon prices.